The U.S. Senate today approved Protocols amending the existing income tax treaties with Switzerland, Luxembourg, and Japan.
Now that the Protocols have been approved by the Senate, there are certain ministerial actions required (such as preparation and exchange of articles of ratification) before ratification is completed in the United States and before the Protocols can enter into force.
These Protocols were negotiated and signed long before the December 2017 enactment of the U.S. tax law (Pub. L. No. 115-97) that is often referred to as the “Tax Cuts and Jobs Act” (TCJA). The Protocols do not appear, however, to modify provisions of the respective treaties that would arguably be relevant to the TCJA.
New income tax treaties with Hungary, Poland, and Chile are still pending. There is no Senate action scheduled on these treaties at this time. Provisions of these full treaties could arguably conflict provisions of the TCJA, and in the case of any conflict, the treaties would prevail because they would be later in time.
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